Drive towards cashless economy growing - BoU 

Cashless payments have been increasing, setting the stage for the achievement of the cashless economy. PHOTO | file

What you need to know:

All digital payment platforms including internet banking, mobile mobile, debit and credit cards increased in the year ended March, according to Bank of Uganda. 

The value and volume of digital payment systems has increased tremendously in the period ended March, according to Bank of Uganda.

During the year ended March, Bank of Uganda said at the inaugural Financial Stability Symposium that data had indicated that both internet banking and mobile money, which are the flagships of online payments had increases signalling a steady growth in the pursuit for the cashless economy.  

Digital payments, which are also known as electronic payment (e-payment) involve no usage of cash.

Speaking at the symposium in Kampala early this week, Bank of Uganda Deputy Director national payment systems Andrew Kawere, said the impressive growth of digital payments rhymes  well with the Central Bank’s strategic plan that seeks to turn Uganda into a cashless economy.

During the year to March, Bank of Uganda data indicates, the value of internet banking rose by 82.8 percent, increasing to Shs63.92 trillion up from Shs34.97 trillion in March 2021 while active users increased from 848,691 in March 2021 to 997,287, representing a growth of 17.51 percent.

Similarly, the value of mobile money transactions rose by 46.5 percent, growing to Shs145.6 trillion from Shs101.5 trillion due to an increase in mobile money transactions from 3.7 billion in March 2021 to 4.5 billion. 

During the period, Mr Kawere said the systemically important payment systems, which include the Uganda National Interbank Settlement System, Automated Clearing House and Central Securities Depository, operated without significant disruptions, noting that digital payments have been mainly driven by a favourable regulatory regime, evolving consumer behavior accelerated by Covid-19 restrictions, and recovery in economic activity.

However, he said, cyber threats remain an inherent risk for digital payments, revealing that two banks, which he did not name, were affected by cyber fraud during the year. During the period, the value of mobile banking transfers stood at Shs5.2 trillion, increasing from Shs2.11in March 2021, representing a growth of 146.1 percent.

The volume of fund transfers stood at 1.72 million in March 2021, increasing to 2.77 million, which represented a growth of 60.66 percent while active users rose from 1.13 million in March 2021 to 1.53 million. 

During the period, active debit cards users increased from 2.59 million to 2.91 while the value of debit card payments increased from Shs961.95b to Shs1.191 trillion, a growth of 23.88 percent during the period.

Bank of Uganda also noted the active credit cards, however declined from 10,481 in March 2021 9,183 while the value of payments rose from Shs34.1b to Shs59.7, representing a growth of 74.89 percent.

Point-of-sale: Volume in million stood at 2.9 in March 2021 and increased to 3.7 in March, which translates to a growth of 25.55 percent. In terms of value it decreased from Shs719.15 billion in March 2021 to Shs 711.58 billion indicating -1.05 percent.

Credit and debit cards      

During the period, active debit cards holders rose from 2.59 million to 2.91 million while the value of debit card payments increased from Shs961.9b to Shs1.191 trillion, a growth of 23.88 percent.

Bank of Uganda also noted that active credit cards, however, declined from 10,481 in March 2021 to 9,183. However, the value of payments rose from Shs34.1b to Shs59.7b, representing a growth of 74.89 percent.

Point-of-sale transactions rose from 2.9 million in March 2021 to 3.7, translating into a growth of 25.55 percent. However, the value of sales dropped from Shs719.15b to Shs711.58b.

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